UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
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November
4, 2015
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Date
of Report (Date of earliest event reported)
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INVESTORS
TITLE COMPANY
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(Exact
name of Registrant as specified in its charter)
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North Carolina
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0-11774
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56-1110199
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(State or Other Jurisdiction of
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(Commission
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(I.R.S. Employer
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Incorporation or Organization)
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File Number)
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Identification No.)
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121 North Columbia Street
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Chapel Hill, North Carolina
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27514
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(Address of Principal Executive Offices)
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(Zip Code)
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(919) 968-2200
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Registrant's telephone number, including area code
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Attached as Exhibit 99.1 and incorporated herein by reference is a copy
of the press release of Investors Title Company, dated November 4, 2015,
reporting Investors Title Company's financial results for the fiscal
quarter ended September 30, 2015.
The information in this Current Report is being furnished and shall not
be deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the
liabilities of that Section, nor shall it be deemed to be incorporated
by reference in any filing under the Securities Act of 1933 or the
Exchange Act, regardless of any general incorporation language in such
filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits. The following exhibit accompanies this Report:
Exhibit 99.1 – Press Release of Investors Title Company dated November
4, 2015.
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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INVESTORS TITLE COMPANY
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Date:
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November 4, 2015
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By:
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/s/ James A. Fine, Jr.
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James A. Fine, Jr.
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President, Treasurer and
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Chief Financial Officer
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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Press release issued by Investors Title Company on November 4, 2015
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Exhibit 99.1
Investors
Title Company Announces Third Quarter 2015 Results
CHAPEL HILL, N.C.--(BUSINESS WIRE)--November 4, 2015--Investors Title
Company today announced its results for the third quarter ended
September 30, 2015. Net income attributable to the Company increased
73.1% to $4,490,962, or $2.28 per diluted share, compared with
$2,594,490, or $1.28 per diluted share, for the prior year quarter.
Revenues increased 17.1% to $34,541,258 versus the prior year quarter,
primarily due to a 17.4% increase in net premiums written, setting a new
quarterly record level of both revenues and premiums written. Real
estate activity was up significantly for the quarter, driven mainly by
higher levels of home purchases and stable levels of mortgage refinance
activity.
Operating expenses increased 8.5% to $28,104,760 versus the prior year
quarter, mainly due to higher agent commissions commensurate with
increased premiums written, partially offset by a higher concentration
of business in markets with lower average commission rates. The increase
in agent commissions was partially offset by a reduction in the
provision for claims, reflecting improved claims experience in recent
policy years. Higher premium volumes and normal inflationary effects
drove other operating expenses marginally higher versus the prior year
quarter.
For the nine months ended September 30, 2015, net income attributable to
the Company increased 48.6% to $10,337,583, or $5.17 per diluted share,
compared with $6,954,526, or $3.41 per diluted share, for the prior year
period. Revenues increased 7.8% to $98,324,874, driven by a 6.5%
increase in net premiums written. Operating expenses increased 2.7% to
$83,732,755 versus the prior year period, mainly due to higher payroll
expenses associated with normal inflationary increases and higher
staffing levels to support ongoing software development activities.
Claims expense was down 13.3% due to improved claims experience in
recent policy years. Agent commissions were flat versus the prior year
period even as premiums grew, as a larger proportion of premiums
originated in markets with lower average commission rates.
Chairman J. Allen Fine added, “We are pleased to report another quarter
with record levels of revenue. Title insurance premiums were bolstered
by higher levels of home sales activity as well as continued increases
in real estate prices. While the pace of loan closings may slow during
the fourth quarter in the wake of the October 3 TILA-RESPA Integrated
Disclosure Rule (TRID) implementation, we remain encouraged that
positive trends in the unemployment rate and overall economic conditions
will sustain the levels of purchase activity, at least for the near
future. Over the long term, we will continue to focus on enhancing our
competitive strengths and profitably expanding our market presence.”
Investors Title Company’s subsidiaries issue and underwrite title
insurance policies. The Company also provides investment management
services to individuals, companies, banks and trusts, as well as
services in connection with tax-deferred exchanges of like-kind property.
Certain statements contained herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, among others, any
statements regarding future home price increases, changes in home
purchase or refinance activity, interest rate changes, expansion of the
Company’s market presence, enhancing competitive strengths, positive
development in housing affordability, unemployment or overall economic
conditions or statements regarding our actuarial assumptions and the
application of recent historical claims experience to future periods.
These statements involve a number of risks and uncertainties that could
cause actual results to differ materially from anticipated and
historical results. Such risks and uncertainties include, without
limitation: the cyclical demand for title insurance due to changes in
the residential and commercial real estate markets; the occurrence of
fraud, defalcation or misconduct; variances between actual claims
experience and underwriting and reserving assumptions, including the
limited predictive power of historical claims experience; declines in
the performance of the Company’s investments; government regulation;
changes in the economy; the possible loss of agency relationships, or
significant reduction in agent-originated business and other
considerations set forth under the caption “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2014, as filed with the Securities and Exchange Commission, and in its
subsequent Quarterly Reports on Form 10-Q.
Investors Title Company and Subsidiaries
Consolidated Statements of Income
For the Three and Nine Months Ended September 30, 2015 and
2014
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2015
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2014
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2015
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2014
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Revenues:
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Net premiums written
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$
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30,945,532
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$
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26,356,835
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$
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86,372,154
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$
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81,115,940
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Investment income - interest and dividends
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1,117,529
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1,064,995
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3,427,055
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3,130,846
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Net realized (loss) gain on investments
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(338,631
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)
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8,689
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601,336
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592,908
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Other
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2,816,828
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2,077,711
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7,924,329
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6,344,163
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Total Revenues
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34,541,258
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29,508,230
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98,324,874
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91,183,857
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Operating Expenses:
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Commissions to agents
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16,898,323
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14,440,264
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48,393,553
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48,242,923
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Provision for claims
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703,979
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1,507,814
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3,621,401
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4,177,478
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Salaries, employee benefits and payroll taxes
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6,957,874
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6,609,425
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21,101,955
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19,250,116
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Office occupancy and operations
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1,342,288
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1,257,009
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4,089,806
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3,683,980
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Business development
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568,189
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552,215
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1,633,358
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1,581,872
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Filing fees, franchise and local taxes
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134,880
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233,079
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572,621
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648,022
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Premium and retaliatory taxes
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573,336
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491,927
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1,684,674
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1,332,492
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Professional and contract labor fees
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661,879
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621,305
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1,926,469
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1,976,272
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Other
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264,012
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196,702
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708,918
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656,653
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Total Operating Expenses
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28,104,760
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25,909,740
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83,732,755
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81,549,808
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Income before Income Taxes
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6,436,498
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3,598,490
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14,592,119
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9,634,049
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Provision for Income Taxes
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1,941,000
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1,004,000
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4,250,000
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2,656,000
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Net Income
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4,495,498
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2,594,490
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10,342,119
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6,978,049
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Net Income Attributable to Noncontrolling Interests
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(4,536
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—
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(4,536
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(23,523
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Net Income Attributable to the Company
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$
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4,490,962
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$
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2,594,490
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$
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10,337,583
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$
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6,954,526
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Basic Earnings per Common Share
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$
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2.28
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$
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1.28
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$
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5.18
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$
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3.42
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Weighted Average Shares Outstanding – Basic
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1,967,923
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2,028,818
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1,995,120
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2,033,637
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Diluted Earnings per Common Share
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$
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2.28
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$
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1.28
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$
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5.17
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$
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3.41
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Weighted Average Shares Outstanding – Diluted
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1,972,233
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2,032,644
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2,000,043
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2,038,875
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Investors Title Company and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2015 and December 31, 2014
(Unaudited)
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September 30, 2015
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December 31, 2014
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Assets:
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Investments in securities:
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Fixed maturities, available-for-sale, at fair value
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$
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98,034,042
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$
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109,048,290
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Equity securities, available-for-sale, at fair value
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35,135,885
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39,254,981
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Short-term investments
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13,884,266
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2,576,993
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Other investments
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10,069,708
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8,530,929
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Total investments
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157,123,901
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159,411,193
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Cash and cash equivalents
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19,290,813
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15,826,515
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Premium and fees receivable
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9,067,775
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8,544,183
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Accrued interest and dividends
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1,286,710
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1,063,837
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Prepaid expenses and other assets
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8,599,846
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7,732,677
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Property, net
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7,176,557
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5,460,805
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Total Assets
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$
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202,545,602
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$
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198,039,210
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Liabilities and Stockholders’ Equity
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Liabilities:
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Reserves for claims
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$
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37,897,000
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$
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36,677,000
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Accounts payable and accrued liabilities
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19,441,453
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18,290,819
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Current income taxes payable
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248,679
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92,192
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Deferred income taxes, net
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5,635,321
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5,415,493
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Total liabilities
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63,222,453
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60,475,504
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Stockholders’ Equity:
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Common stock - no par value (10,000,000 authorized shares;
1,953,418 and 2,023,270 shares issued and outstanding 2015
and 2014, respectively, excluding 291,676 shares for 2015
and 2014 of common stock held by the Company's subsidiary)
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1
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1
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Retained earnings
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129,585,111
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124,707,196
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Accumulated other comprehensive income
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9,606,451
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12,856,509
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Total stockholders’ equity attributable to the Company
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139,191,563
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137,563,706
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Noncontrolling interests
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131,586
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—
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Total stockholders’ equity
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139,323,149
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137,563,706
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Total Liabilities and Stockholders’ Equity
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$
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202,545,602
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$
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198,039,210
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Investors Title Company and Subsidiaries
Net Premiums Written By Branch and Agency
For the Three and Nine Months Ended September 30, 2015 and
2014
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2015
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%
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2014
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%
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2015
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%
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2014
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%
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Branch
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$
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7,967,826
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25.7
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$
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6,815,125
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25.9
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$
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21,281,363
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24.6
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$
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17,922,166
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22.1
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Agency
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22,977,706
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74.3
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19,541,710
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74.1
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65,090,791
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75.4
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63,193,774
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77.9
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Total
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$
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30,945,532
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100.0
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$
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26,356,835
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100.0
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$
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86,372,154
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100.0
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$
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81,115,940
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100.0
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CONTACT:
Investors Title Company
Elizabeth B. Lewter, 919-968-2200
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